Asian Stocks Surge as Traders Expect Fed Rate Cut – Asia Market Wrap

Asian equities gained, joining a global rally, as expectations that the Fed will soon begin decreasing interest rates drove a rush into riskier sectors of the market.

MSCI’s Asia Pacific Index, a barometer for regional benchmarks, reversed a three-day loss after US equities rose to record highs, driving global stocks to a new peak. The index lost some of its earlier gains, driven down by Japanese stocks after the US warned allies of tougher trade rules in the China crackdown. Stocks in Hong Kong and mainland China moved as traders expected additional information from the Third Plenum.

Risk appetite appears to have returned in Asia after rising prospects of a Donald Trump administration sparked concerns about geopolitical and trade threats in recent sessions. Optimism that the Fed will drop rates soon, combined with hints of US retail recovery, boosted sentiment.

Treasury rates were little changed Wednesday, following a decrease on Tuesday. The Dollar remained quite stable. The Yen sank early Wednesday, sliding for a third day against the Dollar.